In May 2025, IndusInd Bank reported something it hadn’t done in almost 18 years: a quarterly loss. And not just any loss, a staggering one.
The bank posted a consolidated net loss of ₹2,329 crore for Q4 FY25, compared to a profit of ₹2,349 crore a year ago. But this wasn’t just a bad earnings quarter. It revealed something much more serious: alleged fraud, accounting lapses, and internal control failures that have shaken investor confidence.
Let’s break it down.
Financial numbers that raised eyebrows
Here’s a snapshot of the financial performance that caught everyone off guard:
| Metric | Q4 FY24 | Q4 FY25 |
| Net Profit/Loss | ₹2,349 crore | ₹(-2,329) crore |
| Interest Income | ₹12,199 crore | ₹10,634 crore |
| Provisions | ₹950 crore | ₹2,522 crore |
For the full fiscal year FY25:
| Metric | FY24 | FY25 |
| Net Profit | ₹8,977 crore | ₹2,576 Cr (-71%) |
So, what caused this huge dip? Turns out, it wasn’t just business performance.
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What triggered the loss?
IndusInd Bank uncovered several accounting irregularities in its books over the past three quarters. Here’s what happened:
1. Derivatives accounting gone wrong
A review by PwC pegged the negative impact of incorrect accounting in the bank’s derivative trades at ₹1,979 crore. The profits from internal trades had been overstated for months.
2. Microfinance misstatements
An internal audit found that ₹674 crore was incorrectly recorded as interest income and ₹172.58 crore as fee income in its microfinance unit. All of this was reversed in Q4, heavily impacting the results.
3. ‘Other Assets’ issue
The bank also found unsubstantiated balances worth ₹595 crore in “Other Assets”.
Combined, these items amounted to over ₹2,600 crore of corrections. Once corrected, the numbers flipped from black to red.
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Leadership exits and governance crisis
Following the revelations, CEO Sumant Kathpalia and Deputy CEO Arun Khurana resigned on April 29. The board has now formed a committee to oversee day-to-day operations until a new MD & CEO is appointed, expected by June 30, 2025.
Chairman Sunil Mehta acknowledged the lapses and said the bank is taking steps to improve internal governance and prevent similar incidents in the future.
What happened to the IndusInd Bank share price?
Unsurprisingly, the share price took a hit:
- Pre-result (April 2025): ₹863
- Post-result (May 2025): ₹770
- YTD fall: ~19%
With such a sharp earnings miss and concerns over fraud, the stock is likely to stay volatile in the short term.
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What happens next?
Audits still ongoing
The bank is cooperating with regulatory authorities and external investigators. Further disclosures may come, which could impact sentiment.
New CEO, new hope?
Investors are waiting to see who takes over as MD & CEO. A credible appointment could help rebuild trust.
Capital position still strong
Despite the hit, the bank’s capital adequacy ratio stands at 16.24%, and it maintains a healthy liquidity buffer of ₹39,600 crore.
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Key takeaways for investors
- This is a governance and trust issue more than a business model failure.
- The core banking operation remains intact, but internal controls failed badly.
- If the bank executes a clean recovery, the share price might bounce back.
- But if more surprises emerge, expect more pain.
As of now, IndusInd Bank’s story is a cautionary tale: profits can be wiped out, but credibility takes even longer to rebuild.
